Background
Shondera Drayton, on her own behalf and as parent and natural guardian of her minor child, sued Mead Johnson, Abbott Laboratories, and Pennsylvania Hospital in Pennsylvania state court. She alleged that her prematurely born child developed necrotizing enterocolitis after receiving cow’s-milk-based infant formula at the hospital and that the hospital failed to warn parents or adopt adequate protective policies.
After an initial removal and remand, the state court dismissed Pennsylvania Hospital with prejudice on preliminary objections. Abbott then removed the case again. The federal district court denied Drayton’s motion to remand, reasoning that she had fraudulently joined the nondiverse hospital because her litigation conduct showed no genuine, good-faith intent to pursue the hospital to judgment. The district court certified that novel jurisdictional theory for interlocutory review, and the Seventh Circuit considered Drayton’s appeal with four similar cases.
The Court’s Holding
The Seventh Circuit held that fraudulent joinder cannot be established by examining whether a plaintiff’s discovery efforts, litigation strategy, or other conduct demonstrates a genuine subjective intent to obtain a judgment against a nondiverse defendant. The doctrine is limited to two circumstances: the plaintiff has falsely alleged jurisdictional facts, or, with all factual and legal issues resolved in the plaintiff’s favor, the plaintiff has no chance of succeeding against the nondiverse defendant.
The district court’s intent-based inquiry departed from Supreme Court and appellate precedent, intruded into state-court litigation management, and threatened uncertain satellite disputes over how actively a plaintiff must litigate to avoid removal. A plaintiff’s motive for joining a defendant does not establish fraudulent joinder when the asserted claim is colorable. The Seventh Circuit therefore reversed the denial of remand and returned the case to the district court for further proceedings consistent with its opinion.
Key Takeaways
- Fraudulent joinder in the Seventh Circuit is limited to false jurisdictional allegations or claims having no chance of success against the nondiverse defendant.
- A plaintiff’s motive, litigation strategy, discovery activity, or perceived lack of enthusiasm for pursuing a defendant does not independently establish fraudulent joinder.
- Courts must resolve factual and legal questions in the plaintiff’s favor, and removing defendants bear a heavy burden to show that the claim is utterly groundless.
Why It Matters
The ruling prevents federal courts from using subjective assessments of litigation conduct to expand diversity jurisdiction. It preserves clearer removal rules, respects plaintiffs’ ability to choose a state forum by asserting colorable claims against nondiverse defendants, and limits federal intrusion into state-court case management.
The decision is particularly significant in multidistrict litigation, where defendants may seek federal consolidation of state-filed cases. The court acknowledged the practical difficulty of managing large MDLs but concluded that any broader removal rule must come from Congress rather than judicial expansion of fraudulent joinder.